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Electrons are cheap – at least electrons are cheap to create. Until recently, it was also cheap to deliver electrons from power plants to customers. That is no longer the case. The electric grid may once have been an engine of economic efficiency, but these days it looks more like an albatross hanging like a noose around our economy's future prospects. To make matters worse, it appears to be tightening.

Over the past half of a decade or so, the cost of generating electricity has plunged as the result of sluggish economic growth and a glut of dirt cheap natural gas. Unfortunately, the decline of wholesale power prices has been offset and, in some places like southern California and downstate New York, eclipsed entirely by escalating transmission and distribution costs.

The bottom line: electrons are cheap to generate and expensive to deliver.

For example, the typical electric utility customer in New York City is charged more for the delivery of an electron than the generation of electron.

And this gap is likely to widen considerably in coming years as utilities scramble to strengthen an aging and dangerously anemic power delivery system built on technologies developed largely in the 1950's or earlier.

Nearly 75% of transmission lines and transformers are 25 years or older and 60% of circuit breakers are more than 30 years old, according to the U.S. Department of Energy.

Electricity use increased by 58% between 1980 and 1999. During the same time period, investment in transmission infrastructure declined by nearly half. Harris & Williams reported that:

In order to avoid power outages from component and equipment failures, analysts believe the industry will replace 0.5% to 1.0% of transmission mileage annually over the next two decades. With approximately 283,000 transmission miles in North America, the annual replacement of 1% of transmission mileage, at a cost of approximately $1 million per mile, represents nearly $3 billion per year in replacement investment . . . . The story on the distribution side of the grid is much the same. Industry analysts estimate that approximately 50% of distribution poles are 30 to 50 years old, and near the end of their useful life. With 2.2 million distribution miles in North America, the annual replacement of 1% to 2% of distribution miles (22,000 to 44,000 miles), at a cost of $140,000 per mile, represents approximately $3 to $6 billion per year. It is important to note that these figures do not include upgrades or new mileage.

Electric utility customers are expected to spend upwards of $6 billion on distribution poles over the next 15 years. While poles may seem like a particularly unproductive way to spend billions of dollars, they are chump change economically speaking, given the sudden surge in infrastructure investment in response to the decades of historical under-investment. Investor-owned utilities spent about $34 billion between 2009 to 2011 on transmission upgrades, according to a survey by the Edison Electric Institute.